The Mandate of Working Group 5 is to identify:

(a) equivalence in the regulatory framework for collective investment schemes, for the purpose of eliminating barriers to cross-border distribution; and

The Working Group responded to the first part of its Mandate by developing the Core Principles for the Regulation of Collective Investment Schemes (the "Principles"), which provide a guide to regulation for all jurisdictions, and in the longer term, may encourage harmonisation of regulation. The Group has also prepared a detailed comparative analysis of the regulatory approaches of members of the Working Group in each jurisdiction.

To address the goals of "eliminating barriers to cross-border distribution" and "enhancement of regulatory co-operation", (as set out in the Mandate), the Group initially sought to develop some guiding principles for mutual recognition and information exchange. It was thought that if cross-border harmonisation of the laws governing CIS could be achieved, the existing differences in regulatory regimes would diminish.

However, because of differences in regulatory regimes and in the objectives of members, the Group decided not to pursue regulatory co-operation through the development of a common set of principles that would bind all jurisdictions. Instead, the Group agreed to develop a Discussion Paper to identify the nature and extent of cross-border activity and regulatory co-operation, and consider strategies for their facilitation.

Based on the discussions and opinions put forward in this Paper, it is open to the Technical Committee to determine how the issues relating to cross-border distribution of CIS and regulatory co-operation could be progressed further, and to assist in determining how the Group can best fulfil the second part of its Mandate.

Glossary of Terms